Helping children build a strong financial foundation starts with understanding the tools available to them. From saving for their first big purchase to investing for the future, there are many ways to help kids build smart financial habits over time.
With the introduction of 530A (Trump) Accounts, families have a new opportunity to begin investing in their children's future.
Here's how these accounts work, what parents should know, and where they fit into the bigger financial picture.
What is a 530A (Trump) Account?
It's a long-term investment account for children designed to give them a head start on building wealth and learning about investing. The money has the potential to grow over time with tax-deferred benefits.
Who’s Eligible?
Children under 18 with a valid Social Security number can generally have a 530A (Trump) Account established for them.
Under the federal pilot program, only eligible children born between 2025 and 2028 can receive a one-time $1,000 government contribution to get started.
How Do I Get My Account?
Eligible children are automatically enrolled, but parents or legal guardians must claim their child's account to manage it, make contributions, and elect to receive the $1,000 government contribution, if eligible.
Visit TrumpAccounts.gov to claim your child's account or call 866-USA-4547 with questions.
When Can the Money Be Used?
530A (Trump) Accounts are designed for long-term investing, so funds generally can't be withdrawn during childhood.
Beginning the year a child turns 18, the money can be used for education, buying a home, starting a business, or other financial needs. However, withdrawals may be subject to income taxes and early-withdrawal penalties.
How Do Contributions Work?
Parents, grandparents, employers, and others can contribute to a child's account, with a general combined limit of $5,000 per year. Certain contributions, including the government's $1,000, don't count toward this limit.
What Could This Look Like?
Even small contributions can make a difference over time. And the good news is that you don't need to know exactly what your child will use the money for to start planning for their future.
For example, according to the official 530A (Trump) Account website, here's what an account started at birth with $1,000 could potentially grow to by age 18:*
- $6,000 with no additional contributions
- $19,000 with $250 contributed annually
- $271,000 with the maximum $5,000 contributed annually
* Estimates are for illustration only, are based on an account opening at birth with $1,000 opening deposit, and are derived from historical S&P 500 averages. Actual results may differ and are not guaranteed.
These examples show the potential impact of starting early and giving investments time to grow.
Comparing Savings Options for Your Child
530A (Trump) Accounts are one way to invest in your child's future, but they're not the only option.
Whether you're saving for life’s biggest moments, budgeting for everyday expenses, or planning for education, it helps to understand how different accounts work.
| 530A (Trump) Account | 529 Education Savings Plan | Traditional Savings Account | |
|---|---|---|---|
| Best For | Long-term investing | Education expenses | Short-term savings goals |
| Tax Treatment | Tax-deferred growth |
Tax-deferred growth; tax-free withdrawals for qualified education expenses
|
Interest generally taxable |
| Access to Money | Generally restricted during childhood; taxes and penalties may apply afterward | Withdrawals allowed; non-qualified withdrawals may have tax consequences | Generally accessible anytime |
| Investment Risk | Subject to stock market fluctuations | Depends on investments selected | No stock market risk; eligible deposits are FDIC-insured |
Tax-deferred vs. tax-free: Tax-deferred means taxes on earnings are delayed until withdrawal, while tax-free means earnings can be withdrawn without taxes when certain requirements are met.
Start the Conversation
Teaching kids about saving, spending, and investing can help build lifelong financial habits. Start with age-appropriate goals, from saving for a new bike to their first car, and introduce hands-on experiences through savings and checking accounts as they grow. Our Savings Goal Calculator can help you plan together.
Whether your child is in preschool or high school, it's never too late to start saving for college or other milestones. At First Mid, we're here to help families explore their savings options and build financial confidence for the future.
530A (Trump) Accounts are not offered or opened through First Mid Bank & Trust.
Non-deposit products and services through Raymond James are not deposits or obligations of the bank, are not insured by the FDIC or any governmental agency, are not guaranteed, and may lose value.
This information is for general educational purposes only and is not intended as financial or tax advice. Consult a qualified financial or tax professional regarding your individual situation.